"We must accept-finite disappointment but never lose infinite hope. Miraclesstart to happen when you give as much energy to your dreams as you do to your fears."
- Martin Luther King Jr
My warm greetings to all of you!
I hope that you and your loved ones are safe and coping adequately with the tremendousupheaval in your lives in the wake of the global pandemic caused by COVID-19. The worldwoke up to this threat in Q4 of FY 2019-20 and the rapid rise of infections and relateddeaths worldwide has led to disruption on an unprecedented scale and dimension. While theworld is racing to contain the spread treat the infected and find a vaccine; the socialpsychological and economic fallout of this pandemic is expected to be felt long and wide.What is driving us through these trying times is hope. It is the hope that things will getbetter safer and as near normal as possible.
We are indeed living through very unusual times and your Company has faced thechallenge of Covid-19. At this point of time all our plants are operational. I take thisopportunity to extend my deepest gratitude to each and every member of the Seya family fortheir resilience and agility in ensuring we keep our operations running and doing all thatwe can to respond effectively to the COVID-19 pandemic. We are determined to work as ateam across the industry to harness our know-how experience and expertise to combat thisevolving crisis and emerge stronger as we come out of this challenge. Our approach to thepandemic was centred around four key actions of:
1. Safety of our employees communities partners and assets
2. Rapid pivot to digital to ensure business continuity
3. Conservation of cash through cost control working capital and capex reduction
4. Ensuring continuous support to our customers and supply chain partners.
FY 2019-20 was an extremely challenging year for the global economy and was marked bymultiple upheavals. Trade conflicts political uncertainties heightened volatility incommodity prices with some never before seen developments with respect to crude oilprotectionism etc. Towards the end of the fiscal unprecedented impact was witnessed fromthe global spread of the COVID-19 which caused turmoil across markets worldwide. Thepandemic has unfolded with alarming magnitude and the severity of the health and economiccrisis is incomparable to any event in recent memory. Government enforced border controlsand lockdowns of varied durations across multiple countries have impacted economicoperations around the world. However even as Governments around the world deploy fiscaland monetary stimulus in order to successfully resuscitate demand it is believed that thesecond and third order effects of the pandemic may limit the pace of recovery. In Fiscal2019-20 the Indian Economy was benefiting from lower interest rates witnessed benigninflation improved liquidity and was on course to witness improved tax collections.Towards the second half of the fiscal India began to witness early signs of an uptick inbusiness activities signalling return of momentum to Asia's third-largest economy inconsonance with the global economy. India was on a relative growth trajectory with thestrengthening of the agrarian space corporate and income tax rate cuts narrowing tradedeficit and increasing foreign investments. The positive outcome of this was expected totranslate into increased consumer demand and private investments which had been slackingfor a while. However those were short lived as the pandemic has derailed the prospectsfor higher economic growth in the short term. The pace of recovery is currently uncertainas the country is yet unwinding from the lockdown and the medium to long term outlook isopaque at every level.
The chemical industry in India has been actively gaining global market share in recentyears and has been a beacon of hope. Leading players have demonstrated intent to scale updiversify offerings and plough earnings back into the business by pursuing innovation andsophistication. Looking towards an optimistic future India's chemical industry is set forsustained growth receiving impetus with capital investment and affirmative Governmentpolicies.
Resilience in Adversity
FY 2019-20 saw a challenging business environment with lower GDP growth and slowdownin consumption. Our business was impacted by global economic weakness in few end-usersegments weakening consumer sentiment slow demand in some large usage verticals sharpvolatility in the prices of key raw materials and currencies and finally the COVID-19pandemic. The novel coronavirus has affected not just human health but severely impactedbusinesses and the society at large. However I am pleased to inform you that despite suchexceptional business conditions your Company has delivered competitive and profitableperformance. We recorded a
Sales Turnover of Rs 258.19 Cr and PAT of Rs 47.01 Cr despite declining revenuesresulting from weakened raw material prices benefits of which are passed on to theCustomers shortage of Nitric acid effluent disposal and water scarcity which impactedour operations and performance. We implemented our Business Continuity Plan aimed atensuring health and protection to all our employees while adhering to the guidelinesprovided by the Government authorities. Manufacturing activities commenced from mid - May2020 in a phased manner based on approvals from local authorities. Well-being of ouremployees and safety of our manufacturing sites were given paramount importance. Given thedevelopments with regard to the COVID-19 pandemic and its fallout the Board prudentlydecided to conserve cash for the quarters ahead.
China which accounts for about 20% of global speciality chemicals revenues hastightened environmental standards resulting in the closure or shifting of capacities inabout 50 chemical manufacturing clusters. The increased labour costs and the COVID-19pandemic have aggravated the situation further as companies seek to reduce theirdependence on China and source alternative suppliers. The continuation of US-China tradewar and a resultant increase in tariffs could have negative implications for its trade andsubsequently the domestic capacity and production in China. All these factors are pushingthe Capex and Opex costs upwards making Chinese chemical companies less competitive inthe export market. Such situation in China is expected to favor Indian producers. Seyawith its integrated value chain and diversified product mix strong technicalcapabilities robust track record and cost-efficient operations forms an ideal fit China.Our teams are working with various existing and prospective Indian and global players onmultiple such opportunities.
As a signatory of Responsible Care to the current paradigm change we remain ardent toour duties and responsibilities. These include creating a safe working environmentadhering to the best management practices and embedding sustainability into ourfacilities. We have dedicated our Strategic Business Units to ensure sustainablemanufacturing and adhering to all the safety norms and standards. The Company is committedtowards responsible chemistry while conserving environment safeguarding our employees& customers and taking care of the welfare of the community. We shall be investinginto further reducing environmental impact with a focus on value from waste'. Eitherdirectly or indirectly we continue to support society around us. Our approach toenvironmental preservation evolves with advancements in science technology and bestpractices. We continue our efforts to reduce our carbon and water footprint and wasteand innovate to address the challenges posed by climate change.
I would like to take this opportunity to reiterate that your Company stands united withthe nation during this challenging phase of COVID-19. As a responsible corporate citizenwe adhered to the Government guidelines that were issued during different phases of theCovid-19 induced lockdown to contain the spread of the virus. With the slow and gradualupliftment of regulations the reopening of plants in different sectors is likely to leadto a gradual recovery.
The Company's fundamentals are intact to support the strong growth prospects. YourCompany believes that committed and qualified teams are the key to contribute towards asustainable future. Rooted in Values is our Integrity Understanding Unity andResponsibility. I must take this opportunity to congratulate and express my appreciationto the human assets of Seya. My dear shareholders your support gave SEYA Incrediblestrength which can't be explained in words. Your belief and confidence in the company andits management helped SEYA to achieve what it has achieved today. We resolute to remaincommitted to significantly keep enhancing value of our stakeholders.
My fellow board members customers vendors and other stakeholders without your supportand encouragement SEYA's growth story is incomplete. In conclusion I will reiterate thewords of Martin Luther King Jr. who said "We must accept finite disappointment butnever lose infinite hope. Miracles start to happen when you give as much energy to yourdreams as you do to your fears." There is enough reason to hope for the better andthat is backed by a focused strategy and a plan of action.
We will overcome! Best Wishes!
for entities looking for alternate supplier independent of
ASHOK G RAJANI
Chairman & Managing Director